Rep. Chris Collins' son and his son's fiancee bought shares of an Australian biotech company just days before dumping the shares after the New York Republican allegedly tipped his son off about a failed clinical drug trial in a phone call from the White House lawn, the Securities and Exchange Commission said in a complaint.
Collins' son, Cameron Collins, and the son's accountant fiancee, Lauren Zarsky, had purchased the stock of Innate Immunotherapeutics in June 2017 because they believed — mistakenly, it turned out — that the trial of the company's multiple sclerosis treatment would yield positive results, the SEC said in its complaint.
The complaint was filed at the same time as a federal criminal indictment Wednesday accusing Chris Collins, Cameron Collins and Zarsky's father Stephen Zarsky of insider trading. It details how and why Lauren Zarsky's parents started investing in Innate in September 2016.
Chris Collins, who represents a Buffalo-area district, had been touting Innate Therapeutics' prospects for years. At the time, he was a member of the company's board of directors, even while serving in Congress. Chris Collins also was Innate's biggest shareholder in early 2016, owning more than 17 percent of the company, or almost 34 million shares.
Cameron Collins and his sister Caitlin were the third- and fourth-largest shareholders, with each owning 2.65 percent of the company at that time, or 5.2 million shares apiece.
"I think we all need to consider investing in innate therapeutics," Lauren Zarsky wrote her mother Dorothy in a text message in August 2016, according to the SEC complaint.
"I might put in $15k and that has a greater than 50% chance of going up to $250k ... that is actually unheard of and cams dads almost guarantees it within the next 1 to 2 years."